Any tax changes if I am Quit Claim to friends home?

My best friend wants to add me as co-owner of his home by way of a Quit Claim. He has no one to leave it to and says he wants me to have it if anything happens to him. He is concerned though that the VALUE of the home when he purchased it, less his homestead status, will greatly increased to todays VALUE if he does a Quit Claim and thus he will be paying much greater taxes on its current value verses the older purchased value, which would stress him financially. Its my understanding the home will NOT be re-evaluated thus increasing the tax value just because he adds me on via a Quit Claim. Is this right or not? I told him if it increases the taxes he had to pay to let it be, I dont want to cause him any hardship. Thanks

1 Answer

Relevance
  • Anonymous
    1 decade ago
    Favorite Answer

    It depends on the laws in your place of residence as to whether the property value would be reassessed. If the deed is filed with the county clerk, you become the owner and he becomes the donor of a gift which could be subject to gift tax.

    I have an discussion concerning the gift tax, the estate tax , fiduciary tax returns and income in respect of a decedent at http://wwwtaxman.blogspot.com/ .

    Gifts and inheritances are much misunderstood as to what is taxable, who is taxable and when a return is required in the case of a gift.

    Call your county tax assessor-collector to see if the deed would result in reevaluation. Also, the deed could be prepared but not filed until he were to die--but check the effect of that course of action with a lawyer before acting.

Still have questions? Get your answers by asking now.